How is EMI calculated?

EMI = P × r × (1+r)^n / ((1+r)^n - 1), where P is principal, r is monthly interest rate, and n is number of months. For example, a ₹50 lakh loan at 8.5% for 20 years has EMI of ₹43,391.

What factors affect EMI?

EMI depends on three factors: loan amount (principal), interest rate, and loan tenure. Higher principal or rate increases EMI, while longer tenure reduces EMI but increases total interest paid.

You can reduce EMI by: increasing loan tenure (but you pay more interest), making a larger down payment to reduce principal, negotiating a lower interest rate, or making part-prepayments.

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EMI Calculator

Calculate your loan EMI with detailed amortization schedule.

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How EMI is Calculated

EMI (Equated Monthly Installment) is calculated using the formula:

EMI = P × r × (1+r)^n / ((1+r)^n - 1)

Where P is the principal loan amount, r is the monthly interest rate (annual rate ÷ 12 ÷ 100), and n is the number of monthly installments.

For example, a home loan of ₹50,00,000 at 8.5% annual interest for 20 years (240 months): r = 8.5/(12×100) = 0.007083. EMI = 50,00,000 × 0.007083 × (1.007083)^240 / ((1.007083)^240 - 1) = ₹43,391 approximately.

Factors That Affect Your EMI

Loan Amount: Higher principal means higher EMI. A larger down payment reduces the loan amount and EMI.
Interest Rate: Even a 0.5% difference in rate can significantly impact EMI and total interest over the loan tenure.
Tenure: Longer tenure reduces EMI but increases total interest. A 30-year loan has lower EMI than a 15-year loan but you pay much more interest overall.
Type of Interest: Fixed rate loans have constant EMI, while floating rate loans see EMI changes based on market conditions.

Tips to Reduce Your EMI

Make a larger down payment to reduce the principal amount
Negotiate a lower interest rate with your bank
Opt for a shorter tenure if you can afford higher EMI
Make periodic part-prepayments to reduce outstanding principal
Consider balance transfer to a bank offering lower rates

Disclaimer: This calculator provides estimates for planning purposes. Actual EMI may vary based on the bank's terms, processing fees, and interest rate type. Please verify with your lender.